Lopez acquired a bullding on June 1, 2015, for $8,284,900. Compute the deprediation deduction assuming the...

 
 

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Lopez acquired a bullding on June 1, 2015, for $8,284,900. Compute the deprediation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2020 if the building is dassified as residential rental real estate. b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as nonresidential real estate. Exhibit 5.5 MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention (Percentage Rates) For Property Placed in Service after December 31, 1986 (Partial Table * ) 3-Year Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter 58.33 41.67 25.00 8.33 2 27.78 38.89 50.00 61.11 5-Year Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter 35.00 25.00 15.00 5.00 2 26.00 30.00 34.00 38.00 7-Year Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter 25.00 17.85 10.71 3.57 2 21.43 23.47 25.51 27.55 Exhibit 5.6 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* For Property Placed in Service after December 31, 1986: 27.5 Year Residential Real Property The Applicable Percentage is (Uise the Column for the Month in the First Year the Property is Placed in Servicelt Recovery Yearlsi 10 12 3481 1182 2.879 2570 1273 1970 1.467 1.36A 1001 075E 0455 0.152. 1636 3636 1636 3636 2-18 166 3636 36 1616 19-27 3637 1637 3.637 3637 3.637 3637 3617 3617 3637 1617 3637 3637 28 1970 2273 2576 2879 3.182 J485 366 3636 3616 29 a.000 0.000 a.000 a000 G.000 0.000 152 0.758 1.061 1364 1.667 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property The Applicable Percentage is (Use the Column for the Month in the First Year the Property is Placed in Servicelt Recovery Vearis 10 11 12 1042 2.778 2513 2249 1.984 1.720 1455 L190 0.926 0661 0.397 0112 3.175 175 1174 14 2-19 3.175 3.175 3.175 3.175 3.174 1.174 3.175 3.175 3175 3.175 3.174 1174 3175 3.175 20-31 3174 1174 1174 1174 1174 3174 32 1.720 1.984 2249 2513 2.778 3042 3.175 3.175 3.175 3.175 0.661 0.926 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.000 0.397 1.190 1.455 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property Recovery Yearlal The Applicable Percentage is (Use the Column for the Month in the First Year the Property s Placed in Servicel: 2 10 11 12 2.461 2.247 2033 1819 1605 1.391 L177 0.963 0749 0.535 0.321 0.107 2-39 2.564 2504 2.504 2564 2504 2.504 2504 254 2504 2504 2.504 254 0.107 0.121 40 05is 0749 0.963 1,177 1.391 1.605 1819 2013 2247 2461 *The official tables contain a separate row for each year. For ease of presentation, certain years are grouped in these tables. In some instances, this will produce a difference of 0.001 for the last digit when compared with the official tables. Exhibit 5.7 MACRS Straight-Line Depreciation for Personal Property and Qualified Improvement Property Assuming Half-Year Convention For Property Placed in Service after December 31, 1986 Other Recovery Years Last Recovery Year MACRS Class % First Recovery Years Year Year 3-year 16.67 2-3 33.33 4 16.67 5-year 10.00 2-5 20.00 6. 10.00 7-year 7.14 2-7 14.29 8. 7.14 10-year 5.00 2-10 10.00 11 5.00 15-year 3.33 2-15 6.67 16 3.33 20-year 2.50 2-20 5.00 21 2.50 Note: The last two rows are used for qualified improvement property (15-year normal MACRS; 20-year ADS). Exhibit 5.8 ADS for Alternative Minimum Tax: 150% Declining-Balance for Personal Property Assuming Half-Year Convention (Percentage Rates) For Property Placed in Service after December 31, 1986 (Partial Table") Recovery Year 3-Year 150% 5-Year 150% 7-Year 150% 9.5-Year 150% 10-Year 150% 12-Year 150% 1 25.00 15.00 10.71 7.89 7.50 6.25 37.50 25.50 19.13 14.54 13.88 11.72 3 25.00* 17.85 15.03 12.25 11.79 10.25 12.50 16.66* 12.25** 10.31 10.02 8.97 5 16.66 12.25 9.17** 8.74** 7.85 8.33 12.25 9.17 8.74 7.33** 12.25 6.13 9.17 8.74 7.33 8. 9.17 8.74 7.33 9.17 8.74 7.33 10 9.16 8.74 7.33 11 4.37 7.32 12 7.33 13 3.66 * The figures in this table are taken from the official table that appears in Rev.Proc. 87-57, 1987-2 C.B. 687. Because of its length, the complete table is not presented. **Switchover to straight-line depreciation. Exhibit 5.10 ADS Straight-Line for Real Property Assuming Mid-Month Convention (Percentage Rates) For Property Placed in Service after December 31, 2017: 30-Year Residential Rental Property Recovery Year Month Placed in Service 10 1 12 1194 2917 2619 2361 2.083 106 1s2a 1.250 as72 0417 0.19 3333 3313 13 1333 3313 EEEE 3.194 2-30 1333 3.333 1333 3333 3.333 3.333 0139 0417 0694 0.972 1.250 1528 1806 2.083 2.361 2639 2.917 For Property Placed in Service after December 31, 1986: 40-Year Nonresidential Real Property Recovery Year Month Placed in Service 10 11 12 2.396 2.188 1979 1.771 1.563 1354 L146 098 0.729 0521 2.500 0313 0.104 2-40 2.500 2500 2.500 2500 2.500 2.500 2.500 2.500 2500 2.500 2.500 41 a104 a312 0s21 0729 0.937 1.146 1354 1.562 1.771 1.979 2.187 2.306 * Also used for residential rental property placed in service before 2018. Lopez acquired a bullding on June 1, 2015, for $8,284,900. Compute the deprediation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2020 if the building is dassified as residential rental real estate. b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as nonresidential real estate. Exhibit 5.5 MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention (Percentage Rates) For Property Placed in Service after December 31, 1986 (Partial Table * ) 3-Year Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter 58.33 41.67 25.00 8.33 2 27.78 38.89 50.00 61.11 5-Year Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter 35.00 25.00 15.00 5.00 2 26.00 30.00 34.00 38.00 7-Year Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter 25.00 17.85 10.71 3.57 2 21.43 23.47 25.51 27.55 Exhibit 5.6 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* For Property Placed in Service after December 31, 1986: 27.5 Year Residential Real Property The Applicable Percentage is (Uise the Column for the Month in the First Year the Property is Placed in Servicelt Recovery Yearlsi 10 12 3481 1182 2.879 2570 1273 1970 1.467 1.36A 1001 075E 0455 0.152. 1636 3636 1636 3636 2-18 166 3636 36 1616 19-27 3637 1637 3.637 3637 3.637 3637 3617 3617 3637 1617 3637 3637 28 1970 2273 2576 2879 3.182 J485 366 3636 3616 29 a.000 0.000 a.000 a000 G.000 0.000 152 0.758 1.061 1364 1.667 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property The Applicable Percentage is (Use the Column for the Month in the First Year the Property is Placed in Servicelt Recovery Vearis 10 11 12 1042 2.778 2513 2249 1.984 1.720 1455 L190 0.926 0661 0.397 0112 3.175 175 1174 14 2-19 3.175 3.175 3.175 3.175 3.174 1.174 3.175 3.175 3175 3.175 3.174 1174 3175 3.175 20-31 3174 1174 1174 1174 1174 3174 32 1.720 1.984 2249 2513 2.778 3042 3.175 3.175 3.175 3.175 0.661 0.926 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.000 0.397 1.190 1.455 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property Recovery Yearlal The Applicable Percentage is (Use the Column for the Month in the First Year the Property s Placed in Servicel: 2 10 11 12 2.461 2.247 2033 1819 1605 1.391 L177 0.963 0749 0.535 0.321 0.107 2-39 2.564 2504 2.504 2564 2504 2.504 2504 254 2504 2504 2.504 254 0.107 0.121 40 05is 0749 0.963 1,177 1.391 1.605 1819 2013 2247 2461 *The official tables contain a separate row for each year. For ease of presentation, certain years are grouped in these tables. In some instances, this will produce a difference of 0.001 for the last digit when compared with the official tables. Exhibit 5.7 MACRS Straight-Line Depreciation for Personal Property and Qualified Improvement Property Assuming Half-Year Convention For Property Placed in Service after December 31, 1986 Other Recovery Years Last Recovery Year MACRS Class % First Recovery Years Year Year 3-year 16.67 2-3 33.33 4 16.67 5-year 10.00 2-5 20.00 6. 10.00 7-year 7.14 2-7 14.29 8. 7.14 10-year 5.00 2-10 10.00 11 5.00 15-year 3.33 2-15 6.67 16 3.33 20-year 2.50 2-20 5.00 21 2.50 Note: The last two rows are used for qualified improvement property (15-year normal MACRS; 20-year ADS). Exhibit 5.8 ADS for Alternative Minimum Tax: 150% Declining-Balance for Personal Property Assuming Half-Year Convention (Percentage Rates) For Property Placed in Service after December 31, 1986 (Partial Table") Recovery Year 3-Year 150% 5-Year 150% 7-Year 150% 9.5-Year 150% 10-Year 150% 12-Year 150% 1 25.00 15.00 10.71 7.89 7.50 6.25 37.50 25.50 19.13 14.54 13.88 11.72 3 25.00* 17.85 15.03 12.25 11.79 10.25 12.50 16.66* 12.25** 10.31 10.02 8.97 5 16.66 12.25 9.17** 8.74** 7.85 8.33 12.25 9.17 8.74 7.33** 12.25 6.13 9.17 8.74 7.33 8. 9.17 8.74 7.33 9.17 8.74 7.33 10 9.16 8.74 7.33 11 4.37 7.32 12 7.33 13 3.66 * The figures in this table are taken from the official table that appears in Rev.Proc. 87-57, 1987-2 C.B. 687. Because of its length, the complete table is not presented. **Switchover to straight-line depreciation. Exhibit 5.10 ADS Straight-Line for Real Property Assuming Mid-Month Convention (Percentage Rates) For Property Placed in Service after December 31, 2017: 30-Year Residential Rental Property Recovery Year Month Placed in Service 10 1 12 1194 2917 2619 2361 2.083 106 1s2a 1.250 as72 0417 0.19 3333 3313 13 1333 3313 EEEE 3.194 2-30 1333 3.333 1333 3333 3.333 3.333 0139 0417 0694 0.972 1.250 1528 1806 2.083 2.361 2639 2.917 For Property Placed in Service after December 31, 1986: 40-Year Nonresidential Real Property Recovery Year Month Placed in Service 10 11 12 2.396 2.188 1979 1.771 1.563 1354 L146 098 0.729 0521 2.500 0313 0.104 2-40 2.500 2500 2.500 2500 2.500 2.500 2.500 2.500 2500 2.500 2.500 41 a104 a312 0s21 0729 0.937 1.146 1354 1.562 1.771 1.979 2.187 2.306 * Also used for residential rental property placed in service before 2018.

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